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tv   Mad Money  CNBC  February 16, 2010 12:00pm-12:30pm EST

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the economy and the job prospect. i'll take those two far-ranging restaurant indicators over the data any day of the week. it's one part commercial real estate. where simon property, and the safiest of real estate operators launches a takeover bid for general growth. a mall operator that had been left for dead a year ago. $10 billion for something the bears would have thought worthless, telling. it's one part natural gas where mitsui comes to america and pace $1.4 billion for anadarko to drill for gas on just a third of the marceles shell holdings. we'll be spiel speaking with anadarko's president and ceo jim hackett later in the show and find out more about the amaze transaction. given that the president is busy awarding loan guarantees to a southern company to build two nuclear power plants that will most likely not be completed until the end of the decade. mitsui doesn't plan to export the west virginia gas to another country. that's right, export it while we
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continue to import billions and billions of dollars from oil from our friends, buddies and pals in the middle east that export will surely happen if president obama continues to support every conceivable form of energy including coal which he believes can be made clean by technology not yet invented, and he does not press for natural gas to be used in vehicles as it is in so many countries around the world. is the good news going to be obscured if oil turns down and gold turns down. it's working today because oil and gold are up. there are still plenty of traders that believe those two commodities are more important to the nation's economic future than the cold, hard facts i just described. so why don't we go to bob pisani on the floor of the new york stock exchange and find out if this time it's different and the domestic news flow is trumping oil and gas and the correction or whether indeed the corrections happen and it's all systems go. bob, good to see you. >> that's my theme all morning. what did happen to the correction? remember last week at this time we were all sitting there wondering what was going with
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greece. the contagion was going to spread and the s&p had dropped 9% from the recent high and we're talking about major correction territory, meaning 10%. you notice ever since eu has come out and said we will back greece and we will, in some way do it, talking tough or not, the markets have calmed down. commodities and i agree with your point, i think gold, copper and the commodities are the most important play in the world today. those are the ones that have been dominating and so the market has been quietly coming back on the heels of the commodity trades. you can see the material group, the energy group and the s&p 500, both of them well past 10% corrections. a week ago, all of them now have retraced about a third of the losses that they've had. so i think the big story is that as long as you can get greece and some of the other southern european countries kicking it down the road if you want, the market stabilized quite a bit, jim. >> bob, we both speak to a lot of traders and have you discovered that they hate it as much as i do because of the
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random nature of knowing whether the day will be good. >> when you have it dominated by high frequency guys that don't get a rat's butt about the fundamentals, it's frauft rating and angry for guys that come if and who think that the countries should be based on inherent earnings. then you have the day traders who have to dump their stock after 2:30 and makes other people, longer term holders really nuts. >> you talked last week about the idea that could so many people be right calling for a correction? is this the rally that comes from so many people being out of the market? >> you know, i think in the last couple of week, the volume has been a little on the light side although friday was a big exemption. we saw a great move up here because of what was going on with berkshire hathaway. there was huge volume in the market at that time. professional guys that you hang out with and i hang out with are confused about the direction of the market and why not move aside here and commit capital until it can happen. >> i can't wait, okay? >> by the way, jim, the simon
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property deal is so big. >> yes! >> we're talking 15% of the malls in the u.s. controlled by simon property and 15% controlled by general growth. one company? 30% of the malls in the united states? >> and we thought real estate would be dead in 2010. it's red hot. there will be fresh new ideas this year from retailers. size, when these guys get the size, they'll the power to negotiate with the retailers. >> amen, bob. thank you so much. we'll stay on the floor of the new york stock exchange and we'll go to duncan, the ceo and director of nyse euronex. welcome back to "mad money." thank you. >> hey, partner, i like beating rays from nyx. tell us how you did it. >> three quarters in a row, maybe we're on a winning streak. we had earnings up, expenses down, head count down and we go into 2010 with meaningful momentum. >> i think you're too humble. i think it's a change in what you're producing.
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i think it's derivatives and options. you told me when you came in would be the highlight and now it's happening, isn't it? >> well, it's been a long journey, right? because four or five years ago 0% of our revenue came from business done down here and the listings business. now it's 20-8 on the other way and you're right. in '09 the real story was derivatives items were up, revenues up and we were number one in ogz. so we've turned a corner. >> it's not chicago that dominates options. duncan, one of the things that i try to get my viewers for "mad money" trying to do and we'll talk about it during the day here, what's the key metric? for the longest time that was market share and that's so clearly wrong. if we want to chart the future of nyse, should we look at the amount of value. what is important to determine the future of where the stock's going. >> when i got here a couple of years ago, all people focused on is what's consolidated markets?
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that's less than 10% of our revenues right now so we're trying to shift people to say watch derivatives volumes and see if we have success in the u.s. futures market and see if we can get into the environmental space. does our technology services portfolio really turn into a portfolio of that delivers revenues and remember, we made some big investments in post-trading connectivity last year that are revenues you can book right now. those are guaranteed revenues for '10, that were not part of the '09 picture. >> is that why you were so forth coming declaring two dividends in a row, making a statement that you will return capital to your shareholders? >> part of that, jim s we see earnings going up and cap exgoing down and one of the first things we did was make sizeable investments in two data center. those come online this year. cap-ex will go down to a more normal level this year, if not next year. we have earnings going up, cap-ex going down and investors very been patient with us. the stock's been pretty flat.
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we have to reward their patience. we know the dividend yield is part of the investment thesis and we have to deliver the goods there. >> one of the things that surprised me by a piece of tape by andrew soshgin of "the new york times." what you just describe side a reason to upgrade, upgrade your debt, but moody's downgraded lower from a-3 to a-2, it seems wrong given the cap-ex discussion you just gave me. >> remember, they're from missouri, right? so they're going to say when you can say whatever you want, you have to show them, and i think, frankly, given that we were a-2 p-1 even though the leverage peaked out at 2.8 times at ebidta and knot it down to 2-6 by the end of the year i tomorrowly believe we'll operate two times and two and a half times and we're comfortable at 8-3 and i think we'll get it there and i don't want to get too ham strung and we'll see not opportunities and i can't
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explore them. that's not sensible either. >> a hindrance? >> i think it's both. they've got a job to do and they need to get the economy back where it needs to be and they'll propose generating ideas that will also create jobs. the question is where do those intercept? we're against the transaction tax and we're muted on the other proposals that are out there. i think it's a mixed bag right now. >> i want to congratulate you. i y you set out a few goals and i have to tell you i thought it was too difficult. you beat them and raise them. thank you so much for coming on "mad money." thanks for the support. >> duncan neederauer, ceo of nyx with a big explanation. i think you got a nice preview. stick arne. the ceo of walgreens is coming up next. coming up on "high noon," cramer's exclusive one-on-one with walgreens ceo greg larson. could it be your prescription for profits? and later, cramer's radar, jim
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zeros in on the real earnings season winners that the street missed all coming up on "mad money high noon."
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"mad money high noon." let's welcome to greg lawson, president and ceo of walgreens, the largest drugstore in the country. he's in the heart of manhattan at the walgreens at times square. mr. lawson, welcome to "mad money." >> hi, jim. it's great to be and i'm at one of my favorite stores in times square. if you haven't, i invite you down. i just heard a few minutes ago that we've given 800 h1n1 shots in this store in the last month or so. so if you haven't gotten your h1n1, we can even take care of you down here as well. good to see you and good to be on. >> we have got a situation in washington where it looks like, evan bayh, this weekend, good-bye. i see over and over again, this thing goes nowhere. you touch more, probably more patients, more consumers than anyone in health care. is your input being used? you seem to have more outcomes input than anybody. >> yeah. i think that, you know, we think
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that we are well positioned across the country to leverage our 7100 community drugstores. we have 50% of the population that lives within two miles of one of our drugstores, jim. we think we're on the front line of health care. our pharmacists, as i was talking about with h1n1 and seasonal flu shot, the fact that we gave -- that we administered 7.5 million seasonal and h1n1 flu shots this past year as compared to 1 million a year ago is a big illustration of how we can play a role in health care going forward. >> how is the turn going? some of the analysts, i have a jefferies report in front of me. no re-check necessary. ccr doug confirmed that is your big re-do of the stores which i've seen i think is working, but i don't know, is the consumer coming in in more numbers than this time last year and let's speak february, too, while we're at it. >> yeah. we're excited about ccr, jim. our customer agreed on a initiative. it's big.
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we have over 640 stores converted at this time. as you know, we kicked it off last spring/summer with 35 stores and we rolled it to houston and dallas and converted nearly 400 stores. the numbers that we're seeing i'm encouraged in the signature categories. those categories are the ones we want to win in, vitamins, health care, skincare so i'm encouraged with what we're seeing in those categories. customer feedback has been very, very well received. i think they like our sight lines, our lower profile. we've made it easier to find merchandise. we're going more toward solution sets and solutions for customers. and just this past weekend, in fact, i saw the latest tweaks to our new decor package which we're going to begin to roll out with our next wave of conversions beginning in march and we not only had the ccr conversions and also a new decor package which i think will make our stores even more appealing and in fact, give us a cleaner, neater and more modern, upscale look. february, year over year in the
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stores that you've redone. better? >> as i said, we're looking at the 400 stores that we implemented in dallas and houston and still analyzing and making tweaks, but what i'm encouraged by is again, the signature cat gores and the categories we want to win in like skincare and so forth. the list is exactly what we'd hoped for. the categories where we want to make sure that we're there for convenience, hardware, glues, for example, and part of ccr to give you a good example we used to carry 23 super glues. we don't need 23 super grews. we need two or three so the customers coming in for convenience can pick that up. signature categories are a few in, and we need to bring that back into the shop and we've done that so we're set to go for the next set of conversions in march. >> your big competitor cvs tooting their horn, saying they're taking share that the front part of the store is doing
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better than walgreens. what should you fire back to them? >> feel good as far as the share gain. we're 85 basis points in market share over the last month. so i think we're continuing to gain and win share. one of the things, jim, we report monthly sales. so obviously we were out there with january sales. our competitor doesn't. they report quarterly sales. when we overlay our comparable months to their quarter, frankly we feel pretty good with how we compare. there's no one more focused on top-line growth than i am right now and we're facing a tough consumer out there that's looking for value, but as far as our compare, i feel pretty good with how we're matching up. >> i'll tell you, sir, i don't recall the time when i'm using 2011 number, i've never remembered where that g could go to 12, 13% growth. valuation doesn't make any sense to me. >> i believe -- certainly i would agree with that. i do think our strategy is on
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point, you know? we kicked off a real solid strategy, a winning strategy about a year ago which is to leverage that footprint that we have across the country. jim, we do believe we have the best corners in america with 7100 drugstores in communities and we're working hard to enhance the customer experience to remain relative and we've certainly kicked off a major initiative to reduce costs and improve our productivity. i think our strategy's on paint, we're executing it and we're focused. >> couldn't agree more. the stock is way too cheap. thank you very much for coming on the show. >> great to be here. >> guys, you don't get bargains like this growth stock selling 12, 13 times earnings. maybe they had a bad month and maybe the next month will be better. stick around, anadarko ceo up next. we'll talk about the pennsylvania sale, just a small, small part of his stake to a big japanese company. stay with us. constantly taking the pulse of the market. you need someone who has the street kred, the track record
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and the market intuition to be your guide however the market moves. let jim cramer be your man on the street.
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let's do what i used to do in my hedge fund. huntington bankshares, that's the number one speculative name. you said that in the beginning of the year on "mad money." a big bank in ohio, making a big turn. sirius, every sing will day that dominates. teva, the proprietary drugs and generic. intel, part of a major semiconductor rally that we're seeing at last. gene mountain, still nothing to write home about, not quite sure what to make about green mountain right here. palladium up and you see all of that. this adobe, watch this. this thing went down four or five points off of the apple decision to not use their product in the ipad. obviously, apple, i think on a major breakout and it does matter that walter isaacson is doing that book with steve jobs
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because steve jobs is not going anywhere. sba communication, you know i'm looking for a cell phone tower rally and those charts look very good, by the way. the street's buzzing over the anadarko-mitsui sales venture. i got up at 4:00, and i knew it would be a good day and i see the pennsylvania assets for what i regard will be a very, very big number. let's talk to anadarko, president and ceo jim hackett a person who i regard as a friend to "mad money." congratulations. this one is a huge one. tell us about it. >> it's exciting. almost as exciting as the music from clint eastwood, this was as good. >> you're the good. i don't have the bad one yet. >> no, we think it's part of this process of validating what the company has in terms of its portfolio. if you look at what mitsui has paid is it values our portfolio
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at $4.5 billion just in the marcelis shell, as you talked about it is good for america and everyone around is interested in this play and we need to get more action on this front within the domestic political system, if you will. >> when we discovered that gigantic russian find, it was pretty clear that we thought that rusha was going to be the biggest exporter of natural gas. we are going to be positioned in this country, this is the same amount of commitment that mitsui did over in russia. we could be as better positioned to be just as big as this russian country? >> we could make the case for keeping it in america first to make sure that the production is going to be available us to domestically. it's a great answer for national security. so today you'd say let's not export it, but ultimately you might. >> we have range resources and you have to give them that he was the pioneer of marcel us.
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you have to give him that. and you saw the president giving loan guarantees to southern which is a company that endorses a lot of different kinds of energy. i'm waiting for him to say, lien, i'd rather see salad oil in our cars than natural gas. are you sometimes perturbed that we've got major countries coming over here. we have the french coming over here and the japanese coming over here and it doesn't get the recognition in washington that the fuel deserves? >> i guy, and i hope it's a matter of time. i'm going back up to washington, to the white house, actually this week. as you know i met with the president and some of his advisors previously a couple of weeks ago and we delivered the message. they're interested in hearing more about it and hopefully it will start to work and it's not just at the administration level, and it's also within congress itself, and i think it's moving in that direction. the key is to get people to actually take action, do what's right for the country and not serve, you know, historic interests. >> jim, one last question. how does a deal like this come
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about? how do the japanese find out about pennsylvania and realize that there's a gigantic amount of natural gas clear across the globe. this is not alaska, this is not russia, this is not the middle east, it's pennsylvania. >> we worked with mitsui in other places. they're partners of ours in mozambique and indonesia. they see us as an environmentally responsible company that's important to them in terms of playing in the domestic arena. they have seen and we worked out a deal in africa before this. they had known that we were interested in trying to do something with properties domestically if we could, to leverage the position we've created. they, i think, like us, as a partner. we like them a lot as a partner and we're very happy to have them here and this is a recognition that everyone around the worlds gets it. we've got to get it. >> you're a moneymaker and the last secondary was one of the best pieces of merchandise ever displayed on the new york stock exchange. thank you for coming on the show. >> thanks, jim. >> jim hackett, anadarko. please don't forget range resources and please, they're
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the largest on marcelus. mad money high noon will be right back. whwhwhwhwhwhwhwhwhwh
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here to try to find it for you every day. i'll see you tomorrow at high noon. "fast money halftime report" is
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coming up next. stick with them! this is "the fast money half time report." we are three hours into the trading day. we are not following the money, we are the money. tim seymour is here at cnbc headquarters at the prop desk and dr. j in vegas and gary com inski in utah donning a black turtleneck. the dow jumping more than 100 points and here is what the real money is doing, betting big that the global commodity trade is back on. not just a global commodity trade, tim, but the risk trade. >> the risk trade is back on especially if you believe they put a backstop on europe and that's what we're seeing today and the commodity story has had m&a behind it in the tr adeel, but you also have real demand that you're starting to see in iron ore and fertilizer space. guys can play both sides. they can play the dollar starting to show some weakness and they can play real demand. >> brian kelly, you've been calling for bounce in the euro

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